CTO Realty Growth acquires 120,000 sq ft Tampa office property leased to Ford Motor Credit Company
CTO Realty Growth has acquired an approximately 120,000 square foot single-tenant office property in Tampa, Florida for approximately USD26.9 million, or approximately USD223 per square foot.
The property is situated on approximately 12 acres and is 100 per cent leased to Ford Motor Credit Company (Ford), the only tenant to have occupied the building since it was built by Highwoods in 1998. The property is four stories and has a parking ratio of over 7 per 1,000 square feet of space. The lease with Ford was recently extended through March 2026. The initial investment yield is approximately 8.4 per cent, which is above the high end of the Company’s 2020 guidance. The transaction was purchased through a 1031 like-kind exchange using approximately USD27 million of the approximately USD37 million of the Company’s restricted cash generated from previously announced property dispositions that were sold at an average cap rate of approximately 4.5 per cent.
The Company also announced that it has collected approximately 90 per cent of the contractual base rents expected in the month of August 2020. Contractual base rents are those owed to the Company per the current lease agreements. Further, the Company agreed to defer approximately 3 per cent of the contractual base rents, with the approximately 7 per cent remaining unresolved. The majority of the unresolved contractual base rent is related to the Company’s property in Falls Church, Virginia leased to 24 Hour Fitness. The Company is in discussion with 24 Hour Fitness and is hopeful to reach an agreement on current and past due rents in the coming weeks.
John P Albright, President and Chief Executive Officer, says: “This acquisition represents an attractive cash flow accretive transaction in a high growth MSA. We have now completed over USD164 million of income property acquisitions in 2020 at a weighted average cap rate of approximately 7.9 per cent which continues to produce strong Company cash flow growth evident in the recent dividend growth and continued REIT conversion analysis.
“We are pleased that we have received strong August collections reaching 90 per cent and the majority of our tenants continuing to remain open and operating.”